Project Management Introduction A company will have any number of projects in progress at one time. These may be as complex as installing a new enterprise wide computer system, creating a new warehouse, or as simple as purchasing a new commercial vehicle. Whatever the project, the management of that project is important to ensure that the deliverables are achieved on time and on budget. Project management incorporates all of the interactions and interrelationships that need to occur to make the project successful. Planning The first element of a successful project is the planning. This phase creates the structure in which the project is developed. The planning phase includes the following; Project Scope Priorities Objectives Constraints Assumptions Roles and responsibilities There are a number of methodologies that can be used in the project planning stage. The first of these is the Work Breakdown Structure (WBS) which defines the basic steps that are involved in the planning. Each WBS element relates to one step in the project plan and defines who will do a task, how the task will be done, when it will be done, where it will done, and how much the task will cost. The Organizational Breakdown Structure (OBS) defines the roles and responsibilities and is linked to the WBS. The OBS groups together similar project activities and relates them to the organization s structure. The OBS is used to define the responsibilities for project, cost reporting, billing, budgeting and project control. It provides an organizational rather than a task based perspective of the project. To develop an OBS you need to develop a hierarchy of the complete organizational structure, define the departments and the project teams, and then define the functional group that allocates the work, and the approval group, who approves the work being performed. The Budget Work Breakdown Structure (BWBS) is developed after the schedule and the budget for each work element is determined. The purpose of the BWBS is to determine a baseline for the cost of the project. Scheduling The scheduling element requires that the management team develop a timeline for the project, which will include the critical path, key milestones, task interrelationships, and lead times. A project plan can be developed that shows these aspects as well as predecessor and successor relationships, resources to achieve the project goal, and resource restrictions such as working hours and availability. The project schedule can be amended as the project progresses, if resources are changed or their availability is altered. The schedule can then be reviewed and a decision can be made to amend the date on which the project goes live, amend the tasks to add more resources, or time allocated for each resource. 1/8
Control The control of the project involves managing the tasks, as well as tracking progress and modifying the plan where appropriate based on issues and changes that occur. The control also includes administration tasks such as collecting information on hours spent by resources and dealing with issues as they are reported. The project budget also requires control to ensure that the progress of the project is on course with the budget. The control of the project should be such that it ensures that the schedule is adhered to and the budget is not exceeded, but that all aspects of the project are successfully completed. The project control should also incorporate the change management process. It is important for any project to incorporate change management as employees should be informed of changes that affect the way they work or their workplace. Regular updates of the progress of project are required via e-mail, townhall meetings, or other communication methods. A successful Project Manager must simultaneously manage the four basic elements of a project: resources, time, money, and most importantly, scope. All these elements are interrelated. Each must be managed effectively. All must be managed together if the project, and the project manager, is to be a success. Resources people, equipment, material Time task durations, dependencies, critical path Money costs, contingencies, profit Scope project size, goals, requirements Most literature on project management speaks of the need to manage and balance three elements: people, time, and money. However, the fourth element is the most important and it is the first and last task for a successful project manager. First and foremost you have to manage the project scope. The project scope is the definition of what the project is supposed to accomplish and the budget (of time and money) that has been created to achieve these objectives. It is absolutely imperative that any change to the scope of the project have a matching change in budget, either time or resources. If the project scope is to build a building to house three widgets with a budget of USD 100,000 the project manager is expected to do that. However, if the scope is changed to a building for four widgets, the project manager must obtain an appropriate change in budgeted resources. If the budget is not adjusted, the smart project manager will avoid the change in scope. Usually, scope changes occur in the form of "scope creep". Scope creep is the piling up of small changes that by themselves are manageable, but in aggregate are significant. For example, the project calls for a building to be 80,000 square feet in size. The client wants to add a ten foot long, 4 foot wide awning over one bay door. That's a pretty minor change. Later the client wants to extend the awning 8 feet to cover the adjacent bay. Another minor change. Then it's a change to block the upwind side to the covered area to keep out the wind. Later, it's a request to block the other end to make the addition more symmetrical. Eventually, the client asks for a ceiling under the awning, lights in the ceiling, electrical outlets, a water faucet for the workers, some sound-proofing, and a security camera. By now, the minor change has become a major addition. Make sure any requested change, no matter how small, is accompanied by approval for a change in budget or schedule or both. 2/8
You can not effectively manage the resources, time and money in a project unless you actively manage the project scope. When you have the project scope clearly identified and associated to the timeline and budget, you can begin to manage the project resources. These include the people, equipment, and material needed to complete the project. A successful Project Manager must effectively manage the resources assigned to the project. This includes the labor hours of the designers, the builders, the testers and the inspectors on the project team. It also include managing any labor subcontracts. However, managing project resources frequently involves more than people management. The project manager must also manage the equipment used for the project and the material needed by the people and equipment assigned to the project. People project employees, vendor staff, subcontract labor Equipment cranes, trucks, backhoes, other heavy equipment or development, test, and staging servers, CD burners or recording studio, tape decks, mixers, microphones and speakers Material concrete, pipe, rebar, insulation or CD blanks, computers, jewel cases, instruction manuals Managing the people resources means having the right people, with the right skills and the proper tools, in the right quantity at the right time. It also means ensuring that they know what needs to be done, when, and how. And it means motivating them to take ownership in the project too. Managing direct employees normally means managing the senior person in each group of employees assigned to your project. Remember that these employees also have a line manager to whom they report and from whom the usually take technical direction. In a matrix management situation, like a project team, your job is to provide project direction to them. Managing labor subcontracts usually means managing the team lead for the subcontracted workers, who in turn manages the workers. The equipment you have to manage as part of your project depends on the nature of the project. A project to construct a frozen food warehouse would need earth moving equipment, cranes, and cement trucks. For a project to release a new version of a computer game, the equipment would include computers, test equipment, and duplication and packaging machinery. The project management key for equipment is much like for people resources. You have to make sure you have the right equipment in the right place at the right time and that it has the supplies it needs to operate properly. Most projects involve the purchase of material. For a frozen food warehouse, this would be freezers, the building HVAC machinery and the material handling equipment. For a project to release a music CD by a hot new artist, it would include the CD blanks, artwork for the jewel case, and press releases to be sent to deejays. The project management issue with supplies is to make sure the right supplies arrive at the right time (we'll talk about the right price later). All your skill in managing resources won't help, however, unless you can stick to the project schedule. Time management is critical in successful project management. 3/8
Time management is a critically important skill for any successful project manager. I have observed that Project Managers who succeed in meeting their project schedule have a good chance of staying within their project budget. The most common cause of blown project budgets is lack of schedule management. Fortunately there is a lot of software on the market today to help you manage your project schedule or timeline. Tasks duration, resources, dependencies Schedule tasks, predecessors, successors Critical Path changeable, often multiple, float Any project can be broken down into a number of tasks that have to be performed. To prepare the project schedule, the project manager has to figure out what the tasks are, how long they will take, what resources they require, and in what order they should be done. Each of these elements has a direct bearing on the schedule. If you omit a task, the project won't be completed. If you underestimate the length of time or the amount of resources required for the task, you may miss your schedule. The schedule can also be blown if you make a mistake in the sequencing of the tasks. Build the project schedule by listing, in order, all the tasks that need to be completed. Assign a duration to each task. Allocate the required resources. Determine predecessors (what tasks must be completed before) and successors (tasks that can't start until after) each task. It's pretty simple and straightforward. For instance, think of a project called "Getting Dressed In The Morning". The task "put on shirt" may have a longer duration if it is a buttoned dress shirt than if it's a pullover. It doesn't matter which order you complete the tasks "put on right shoe" and "put on left shoe", but it is important to complete the "put on pants" task before starting the "put on shoes" task. The difficulty in managing a project schedule is that there are seldom enough resources and enough time to complete the tasks sequentially. Therefore, tasks have to be overlapped so several happen at the same time. Project management software (see sidebar) greatly simplifies the task of creating and managing the project schedule by handling the iterations in the schedule logic for you. When all tasks have been listed, resourced, and sequenced, you will see that some tasks have a little flexibility in their required start and finish date. This is called float. Other tasks have no flexibility, zero float. A line through all the tasks with zero float is called the critical path. All tasks on this path, and there can be multiple, parallel paths, must be completed on time if the project is to be completed on time. The Project Manager's key time management task is to manage the critical path. Be aware, that items can be added to or removed from the critical path as circumstances change during the execution of the project. Installation of security cameras may not be on the critical path, but if the shipment is delayed, it may become part of the critical path. Conversely, pouring the concrete foundation may be on the critical path, but if the project manager obtains an addition crew and the pour is completed early it could come off the critical path (or reduce the length of the critical path). Regardless of how well you manage the schedule and the resources, there is one more critical element managing the budget. 4/8
Often a Project Manager is evaluated on his or her ability to complete a project within budget. If you have effectively managed the project resources and project schedule, this should not be a problem. It is, however, a task that requires the project manager's careful attention. You can only manage effectively a limited number of cost items, so focus on the critical ones (see the 80-20 Rule in the sidebar). Costs estimated, actual, variability Contingencies weather, suppliers, design allowance Profit cost, contingencies, remainder Each project task will have a cost, whether it is the cost of the labor hours of a computer programmer or the purchase price of a cubic yard of concrete. In preparing the project budget, each of these costs is estimated and then totaled. Some of these estimates will be more accurate than others. A company knows what it will charge each of its projects for different classifications of labor. Commodities like concrete are priced in a very competitive market so prices are fairly predictable. Other estimates are less accurate. For instance, the cost of a conveyor system with higher performance specifications that normal can be estimated to be more expensive, but it is hard to determine whether it will be 10% more or 15% more. For an expensive item, that can be a significant amount. When the estimated cost of an item is uncertain, the project budget often includes a design allowance. This is money that is set aside in the budget "just in case" the actual cost of the item is wildly different than the estimate. Unusual weather or problems with suppliers are always a possibility on large projects. Companies usually include a contingency amount in the project budget to cover these kinds of things. So a project budget is composed of the estimated cost, plus the contingency and design allowance, plus any profit. The project manager's job is to keep the actual cost at or below the estimated cost, to use as little of the design allowance and contingency as possible, and to maximize the profit the company earns on the project. To maximize your chances of meeting your project budget, meet your project schedule. The most common cause of blown budgets is blown schedules. Meeting the project schedule won't guarantee you will meet the project budget, but it significantly increases your chances. And above all, manage the project scope. Don't allow the project scope to "creep" upward without getting budget and/or schedule adjustments to match. Successful project management is an art and a science that takes practice. The ideas presented above can give you a basic understanding of project management, but consider it only a beginning. If your job or career path includes project management, and you want to improve your skills, talk to successful project managers, read, and practice. Project management can be a very rewarding career. Do you keep progress reports on a daily basis? On a weekly basis? Do you need frequent review meetings? How often you monitor a project depends on several factors: The scope of the project The number of people working on the project The skill level of the individuals working on the project The schedule/time frame of the project 5/8
The familiarity of the project (are team members taking on tasks that they have not done before?) Communication needs (are stakeholders, upper-level managers, or others waiting for, or expecting, regular updates?) The complexity of the project (are there numerous technical details?) The level of risk associated with the project The resources associated with the project Let's look more closely at each of these factors to help determine how often to monitor a project. Scope Larger projects will generally require closer and more frequent monitoring, since numerous activities are taking place and there is a greater likelihood that some areas of the project will fall behind or that a problem will arise. A larger project will need a more formal system of monitoring while a small, or family, project can be monitored informally. Number of People on the Project When more people are involved, the chance of human error is greater, no matter what the overall scope of the project. Unless everyone is doing the same task, it takes closer monitoring to make sure each person stays on track. (Don't overdo it, however. More on this later.) Usually, more people will mean more monitoring. However, fifty people performing the same activity may be easier to monitor than ten people doing ten different tasks, because you will be able to use the same baseline criteria for the fifty people. Get to know more than one person at the company (unless it is an individual subcontractor). If you can't reach one person, or if your contact leaves the company, you can still get in touch with someone who can find out what part of the work is completed and what needs to be done. If outside contractors, suppliers, consultants, and others are necessary to help complete your project, it may be hard to keep track of their progress, especially if they are working off site. It's to your advantage to include them in aspects of the project. Keep them updated on the project's progress, include them in team get-togethers, etc. The more involved they become, the more accessible they will be, and the easier it will be for you to get the updates you need. You can set up the how and when of supplying you with a progress report, but you'll often get better results by establishing a good rapport with outside vendors and resources. Skill Level You may have experts who have done the same activities many times before. These individuals may not need to be monitored as often or as closely as people who are doing a task for the first time. So as not to micro-manage, you may simply set up more frequent checkpoints in the process or have more meetings to closely monitor individuals who are less familiar with specific tasks. You can also make it clear that people should be able to approach you with questions or problems, especially if they are being trained or are new to a specific task. 6/8
Schedule If the project requires presenting deliverables every couple of weeks, you will want to monitor on a weekly basis (at the least). A longer project with more time committed to each task and no deliverables until the end result may allow you greater intervals before you'll need to monitor the progress. You can judge your progress based on when the team reaches specific milestones on your original schedule, which is a very common way to monitor projects. Remember, each person needs to stay on schedule. The farther behind the project falls, the more closely you'll have to monitor progress. Generally, there's a little slack built into the schedule, but the further behind you fall, the less slack there is to play with. If, for example, you know that the project can run three days behind schedule, and you're already two days behind and not even halfway finished, you'll need to monitor more closely to see where you can pick up the pace. Familiarity of the Project If you've never done this project before, you'll need to monitor more closely to make sure you haven't veered off course. It will be important to have a prototype or some form of blueprint or document on which to base your project. If, for example, you're setting up a backyard swing set for the kids, you'll have to check the diagram more closely as you go and double check for safety each step of the way. When a team has done a similar project in the past, you can monitor more loosely. Communication Needs If stakeholders or others expect monthly, weekly, or daily updates or reports, you have to furnish them with the latest project news. That news will come from monitoring your project to respond to their needs. Make sure you address the needs of the individuals waiting to hear the latest developments. High-profile projects, such as the building of a new bridge or a new convention center, will often require you to provide frequent updates to numerous media sources as well as politicians and other government offices. Complexity The more nuts and bolts there are in the project, the more closely you'll need to oversee what is going on. Complex projects are more likely to have potential for error, so they need to be tracked more closely. These may include numerous tests for quality assessment. Risk Risk is a relative term. Building a power plant takes much closer monitoring than planning a convention. A project that can be potentially detrimental to the world at large obviously requires much closer monitoring than building the backyard pool. The risk that your new corporate offices will not be ready on time does not affect the world at large; however, it does affect the success of your company and the jobs of many people. Projects involve two levels of risk. One is the risk of the project failing in the larger picture and the other is internal risk, meaning that the project won't get completed. While your first risk is that of the project failing, the greater risk lies in the consequences of the project failing, which will affect the stakeholders. But how? Will the company fall behind in the marketplace, causing lower sales figures and costing people their jobs? Will people simply have to wait fifteen minutes longer for the bus because the new subway-line project 7/8
bombed? Basically, if a project fails and no one is affected by it, then there wasn't much risk involved. But if the project fails and shuts down the city of Pittsburgh for two weeks, there was significant real-world risk involved. Monitor accordingly. Don't assume that because a team worked on a similar project a month ago they won't need any monitoring this time around. You'll still need to monitor for accuracy, safety, and other issues. Remember, every project is different, with unique concerns and issues. Resources What do you need to complete the project? Resources may seem plentiful when you start out, but they can run out fast. From labor to paper clips, it's important that you keep an eye on what is running low. Do you need toner for the printer? Are you out of cement for construction? Has your art director just left for another project? Monitor what you have and what you need. Once you monitor the project (as often as necessary to keep you abreast of what is going on), you will need to do something with the data you have gathered. The point of monitoring a project is that someone will gain insight from the information. After all, if you monitor a project and no one ever reads or evaluates the data, what is the point? Gather the information, then compare and analyze what you have gathered and make an assessment of where you stand in each area. 8/8